SHARE
COPY LINK

ECONOMY

Denmark’s economy ‘worst hit’ in Nordic countries by coronavirus

Denmark is lagging behind other Scandinavian countries in regard to cushioning the impact of the coronavirus crisis on the national economy, according to analysts.

Denmark’s economy 'worst hit' in Nordic countries by coronavirus
Central Copenhagen on January 12th. Photo: Emil Helms/Ritzau Scanpix

A number of economists have noted that Denmark is faring worse economically during the crisis than Norway, Sweden and Finland, in part because its restrictions have been tighter, financial media Finans reports.

“We (Denmark) are the ones who have got by the worst in the Nordic region. That is now very clear. But we have also had the hardest lockdown,” Helge Pedersen, senior economist with bank Nordea, told Finans.

Denmark’s GDP increased by 0.6 percent in the fourth quarter of 2020, giving an overall reduction to the economy of 3.7 percent last year compared to 2019, according to preliminary figures from Statistics Denmark.

That is a bigger hit to the economy than those suffered in any of the other three Nordic countries on the European mainland, Finans writes, noting that in Norway and Finland GDP expressed as prices decreased by 1.5 percent in 2020 (the figures for the latter country are preliminary), while for Sweden, that number was 2.5 percent. The calculations are attributed to the bank Handelsbanken.

All four countries have spent significantly on compensation and furlough packages, but Denmark was the only country to pump money directly into its economy.

This was done through allowing wage earners in the country to claim so-called ‘holiday money’ funds ahead of schedule. The Danish state footed the bill for the claims.

READ ALSO: After Danish payouts to boost economy, what is cash being spent on?

That increased consumer spending in October and November, which served to avoid an even worse Danish slump, Finans reports.

“We got through the year without massive unemployment and waves of bankruptcies in Denmark. That is good in a broader perspective. But neither did that happen in other Scandinavian countries. On the other hand, the lockdown has hit the Danish economy a little harder,” Handelsbanken’s senior economist Jes Asmussen told the media.

Sweden is well-known for having taken a softer approach to societal shutdowns and restrictions throughout the pandemic, only recently changing tack towards stricter measures.

Norway’s restrictions have been similarly stringent to those in Denmark but have generally had a shorter duration and a more regional focus.

The Danish economy is likely to continue to feel a relatively high economic impact into 2021. Projections by the two banks suggest that the first quarter of 2021 will see a 2 percent shrinkage in Denmark’s GDP, larger than that in Sweden. Norway and Finland’s economies are forecast to grow slightly.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SAS

‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers. 

SHOW COMMENTS